Sensex Sheds 0.2%, Tata Motors Rallies

Ivaylo
10 Jul, 2007
New York City

The market opened higher and until mid-day trading was steady. In the afternoon session profit taking emerged which weighed on banking, cement and telecom shares, while auto and IT stocks saw intense buying. Tata Motors led the advancers with Infosys also advancing. Reliance Comms and HDFC Bank led the decliners. The Indian rupee edged higher towards a nine-year high. Infosys Technologies releases its Q1 results on Wednesday, July 11 2007.

[R]7:30AM NY-6:30PM Mumbai Sensex sheds 36 points, Tata Motors rallies, the rupee advances.[/R]

The Sensex on BSE finished 35.85 points lower, or 0.24%, at 15,009.88.

The benchmark index opened 54 points higher at 15,100.13 and rallied to a record high of 15,114.95 in morning trading, a gain of 69.22 points for the day. It dropped to a low of 14,966.40 in early afternoon trading.

The market-breadth was positive in the morning, but turned strongly negative in the latter part of the session. Of the 2,710 stocks traded on the market, 1,170 advanced, while 1,467 declined and only 73 were unchanged. Of the 30 stocks in the Sensex, 14 advanced, while 16 declined. The turnover on BSE was Rs 5,024 crore, higher than Rs 4,845 crore on Monday. On NSE, the turnover was Rs 10,720 crore, compared to Rs 9,762 crore on Monday.

Economic news

The Indian rupee edged higher towards a nine-year high as there is some speculation that overseas funds will buy more local equities as the economy expands. In early trade, the rupee stood at 40.39 per dollar, up from 40.423 on Monday, and close to a nine-year high of 40.28 struck in late May 2007.

Trading highlights

ICRA was the most active stock with a turnover of Rs 186.50 crore followed by Orbit Corporation and DLF.

Tomorrow might be a crucial day for the markets with all eyes set on the Infosys as the company releases its Q1 results.

Advancers of the Day

Tata Motors rallied 4% to Rs 745 and was the leading gainer on reports that the company may list its profit-making arms.

Auto shares surged on expectations that the RBI will not raise interest rates in near future, as 50% to 75% of sales in the auto sector are derived from loan funds. Maruti surged 2.4% to Rs 813. Mahindra & Mahindra advanced 1.2% to Rs 788 and Bajaj Auto ended up 1.1% to Rs 2,128.

IT stocks also rallied, as the market considered the IT sector performance as being underestimated recently, given the strong core potential of the tech shares. Infosys advanced 1.3% to Rs 2,020. Satyam added 1% to Rs 497.

Decliners of the Day

Banking, cement and telecom shares were under pressure today. Reliance Communications led the decliners plunging 1.8% to Rs 543 and HDFC Bank dipped 1.7% to Rs 1,148.

In cement stocks, Grasim lost 1.5% to Rs 2,727 and Ambuja Cements dropped 1.4% to Rs 130. Engineering and construction company Larsen & Toubro shed 1.1% to Rs 2,389 although it won a Rs 542-crore order from Indian Oil Corporation.

SBI slipped 1.3% to Rs 1,551 and Bharti Airtel also dropped nearly 1.3% to Rs 872. Index heavy Reliance Industries lost 0.5% to Rs 1,702.

[R]6:30AM European markets are lower Tuesday dragged by poor performance by Home Depot.[/R]

All three major bourses were lower on Tuesday.

In London, FTSE 100 shed 0.2% at 6,700.80. U.K. stocks fell, led by Antofagasta, Xstrata and BHP Billiton Ltd. as copper prices reversed earlier gains in Asia. BHP Billiton dropped 1.2%. Marks & Spencer Group limited declines after the company beat analysts estimates and advanced 2.9%. Next also advanced 1.3%. Unilever climbed 3.7% amid takeovers in the food industry. Wolseley slipped 2.3% after U.S.-based Home Depot lowered its profit forecast.

In Germany, DAX 30 lost 0.3% at 8,051.82. DaimlerChrysler gained 1.8% as UBS raised its price target to 90 euros from 75 euros and kept its buy rating. The broker suggested six ways to improve Daimler truck division, including a sale of its Japanese business Fuso and job reductions in Germany.

In France, the CAC 40 dipped 0.3% at 6,085.28. Carrefour declined 0.8% ahead of the release of the first-quarter revenue of the French supermarket chain, due out after the Paris close. In another development, Groupe Danone offered to buy Royal Numico $16.8 billion in cash to gain the biggest share of the baby-food market in Europe. Numico shot up 23.5%, while Danone lost 1%.

[R]5:30AM Gold, silver gain while corn finishes lower.[/R]

Gold kept clambering out of its late-June trough of $638 an ounce, with the August contract advancing $7.70 an ounce to end at $662.50 on the New York Mercantile Exchange, supported by the dollar which dipped against the euro.

Other precious metals tracked gold higher. September silver closed at $12.82, up 6.3 cents an ounce.

Copper prices gained as the London Metal Exchange released a large outflow of inventory and as workers at a major Chilean mine went on strike. Nymex September copper gained 3.5 cents to $3.6295 a pound.

In the energy market, oil sank under the pressure of hopes for a corresponding decline in demand for crude from the Whiting, Ind., refinery. The unit, closed for maintenance, processes about 250,000 barrels of crude daily. Crude for August delivery shed 62 cents to close at $72.19 a barrel on the Nymex..

Brent crude hit an 11-month high of $76.34 a barrel on ICE Futures in London.

Gasoline futures surged 3.5 cents to finish at $2.3446 a gallon.

December corn inched down 1.6 cents to settle at $3.502 a bushel on the Chicago Board of Trade. Wheat for September also pulled back 10.4 cents to $5.994 a bushel.

Meanwhile, soybean prices surged over the $9 mark for the first time since 2004. November soybeans added 6 cents to close at $9.02 a bushel.